Euro-Zone Needs Storage

Six hectic and eventful years have passed since my arrival in England from Australia. Business takes me on regular "flying visits," where as soon as I am out of one office, I am in another airport lounge ready for take-off. This past summer, however, I piled my family into the car and headed off along the auto routes, autostrada and autobahns of Europe.

The first and lasting impression I had was of the continent's vastness. This may sound strange coming from someone raised in Australia's great open spaces. But in regard to Europe, I use "vastness" to describe the huge concentration of towns, cities, businesses, culture and activities across borders, rivers, mountains and plains. There is also a vast opportunity for the growth of the self-storage industry on this continent, indeed in the new "Euro-Zone."

An Industry in Its Infancy

The U.K./European self-storage industry is in its infancy. The first facilities were small, locally crafted affairs, cobbled together in a poor imitation of what their founders saw happening in the United States. In the past six years, the industry has been going through growing pains, adapting old warehouses. It has also adopted better standards of construction and fit-out, as manufacturers entered the market with up-to-date corridor, partitioning, door and access-control systems.

All the same, the heart of the industry in Europe is still focused on the main capital cities where, inevitably, the only sites available have been former industrial warehouses. These structures, due to planning restrictions, cannot be demolished, but need to be painstakingly converted to their new use.

The industry has found confidence as it is supported by significant investment from large corporations looking to diversify, overseas companies seeking to enter new markets, and a number of smaller operators involved in related activities such as storage and removals. This confidence has allowed operators to open new-build facilities on main routes on the outskirts of secondary towns and cities, much the same way business developed in mature markets in the United States and Australia.

On the Road, Again

Getting back to my summer travels, no sooner than driving off Le Shuttle—the railroad that hauls cars through the Channel Tunnel that joins England and France—I noticed the bustle of industry and commerce around the port of Calais, France, where there was not a self-storage facility in sight. What a difference from the roads leading out of many major U.S. or Australian towns, where you encounter facility after facility.

As I took the autoroute to the border town of Strasbourg, France—a significant city in the running of the ever-growing European union—I noticed things begin to change. There, I visited the ultra-modern Homebox operation, which has quickly become a 21st century standard-setter for the European self-storage sector. From there, it's a short hop across the border into Germany and the city of Freiburg. Although similar in size to Strasbourg, it has no self-storage facilities. Self-storage is a very new product to Germany, with only a couple of facilites in the whole country.

Next, we went to Austria via the 14-kilometer Arhlberg tunnel to the city of Innsbruck, the location of the 1964 and 1976 Winter Olympic Games. This city is famous for its winter sports and tourism. It has a university, a planetarium and a population of 140,000 that is mainly employed through these activities as well as some heavy industry. There is no self-storage here yet, but it is off to a successful start in other parts of Austria--four facilities now trade very successfully in Vienna and Gratz. I think Arhlberg also has the demographic requirements to work for the industry.

We spent the night above the city in the mountains and, in the morning, left via the famous Brenner Pass to Italy, which is about a 30-minute drive. This is some of the most breathtaking country in the world, as well as some of the most incredible motorway construction I have ever seen. We were now in a country with 58 million people, most of whom live in apartments and earn some of the highest salaries in Europe. At this time, there are about 12 facilities in Italy, and every one of them is filling fast. All are modern and well in excess of 30,000 square feet.

Next, we drove south to Lake Garda, past Bolzano and Trento, and on to the famous port city of Genoa. This city boasts its lack of space—even the tourist guides confirm this. With a population of 750,000, the city is more than a 1,000 years old. There is plenty of industrial and warehouse space, but the concept of self-storage has not arrived here yet. This is where I realized I needed to share my travel experience with the self-storage community. The opportunity is huge, as is the task of moving this market forward.

CITIES TO CONSIDER AND INVESTIGATE

CITY

POPULATION

COUNTRY

Innsbruck

140,000

Austria

Messina

280,000

Italy

Bolzano

100,000

Italy

Brescia

196,000

Italy

Trento

102,000

Italy

*Milan

1,300,000

Italy

Verona

258,000

Italy

Venice

317,000

Italy

Turin

991,000

Italy

Genoa

701,000

Italy

Naples

992,000

Italy

Padua

211,000

Italy

Palermo

730,000

Italy

*Rome

2,640,000

Italy

Florence

375,000

Italy

Rennes

211,000

France

Geneva

772,000

Switzerland

Zurich

350,000

Switzerland

Dijon

152,000

France

Reims

185,000

France

* Denote cities with self-storage sites

Europe's Opportunities

Get out there, check it out, and be amazed at the almost unlimited opportunities you will encounter in many European towns and countries. But you need to understand the subtle differences in market requirements from one region to another. To assist you in finding the best locations and meeting local partners—or local investors who, like yourself, are keen to see the self-storage sector succeed—contact people who are already working in the European self-storage market.

Self-storage is taking its time in its global progression. Perhaps this will benefit us all in the long run, as it allows those involved in the industry to adjust to the huge opportunity and prepare for their own roles in the expansion. I hope to see foreign and local investors entering the business in Europe—there certainly are promising sites waiting. Whichever way you look, there is a lot of history here, but no doubt a great future for self-storage as well.

Jonathan Perrin is co-founder of the Steel Storage Group, which has factories in Australia, France, New Zealand and the United Kingdom. For more information, visit www.steelstorage.co.uk.